Intel Corporation Prepping New Gaming Chips for August Launch

By Ashraf Eassa Markets Fool.com

Microprocessor giant Intel (NASDAQ: INTC) is preparing to launch its next generation high-end desktop (HEDT) personal computer chips and platform at the Gamescom trade show beginning on Aug. 22, per a report from the generally reliable website BenchLife.info.

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Intel's HEDT lineup makes up a relatively small portion of the company's overall desktop PC chip sales, but these chips tend to carry very high average selling prices and are much more lucrative per unit than the company's mainstream desktop personal computer chip lines.

The report has some information about the new lineup, so let's take a closer look.

New chipset, broader line of chips

Intel's previous HEDT platform, based on the X99 chipset, supported processors that the company code-named Broadwell-E. These are six-, eight-, and 10-core chips based on the company's Broadwell architecture, manufactured in the company's first-generation 14-nanometer technology. The chips list at around $434 and go all the way up to $1723.

The upcoming HEDT platform, which is based on a newer chipset dubbed X299, is said to support a broader range of chips. The Broadwell-E chips will see direct successors in the form of a chip family called Skylake-X, which BenchLife says will come in six-, eight-, and 10-core variants.

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Image source: Intel.

The main improvements from Skylake-X, then, are expected to come from changes to the fundamental chip architecture (both the processor cores and all the "stuff" that surrounds the cores should be new) as well as to the manufacturing technology -- Skylake-X is said to be manufactured in Intel's enhanced 14-nanometer+ technology.

New to this platform, though, will be a family of chips called Kaby Lake-X. These chips are believed to be the same fundamental chips as the Kaby Lake-S processors that Intel launched earlier this month for mainstream desktops, but they will be modified to fit into motherboards utilizing the X299 chipset.

The integrated graphics processors on these chips are also believed to be disabled on the Kaby Lake-X chips -- a prudent move as the motherboard infrastructure required to support integrated graphics adds cost but is of minimal value to the target market (which will want to use stand-alone graphics processors).

The addition of the Kaby Lake-X parts to the lineup should allow Intel to offer a broader range of chips on the HEDT platform at potentially lower price points, which could help to boost the adoption of said platform.

No "X" processors?

A translation of the BenchLife report indicates that all the chips that will initially launch for the X299 platform will be designated with "K" suffixes in their model numbers, with no "X" models at launch.

The current HEDT lineup on the X99 platform consists of four chips: Core i7-6800K, Core i7-6850K, Corei7-6900K, and Core i7-6950X. The six- and eight-core models are designated with "K" suffixes, while the top-end 10-core model has an "X" suffix.

It doesn't make sense for Intel to completely abandon chips with the "X" suffix -- after all, the ultra-premium positioning/branding of the "X" chip probably helps to boost the perceived value of the chip.

My inclination, then, is to think that Intel might be planning an even higher-end "X" part later down the line, with additional performance and/or features.

Investor takeaway

A new HEDT platform isn't going to be a game changer for Intel's financials or its stock price, but new products could allow the chipmaker to maintain or even slightly grow its average selling prices within this portion of its desktop PC chip shipments.

Given that the personal computer market is expected to suffer unit declines for quite some time, any and all actions that Intel can take to improve its average revenue per PC with interesting new products (which can help to offset the unit declines) should be welcomed by stockholders.

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Ashraf Eassa owns shares of Intel. The Motley Fool recommends Intel. The Motley Fool has a disclosure policy.